J. Kelly Kennedy, Attorney/CPA, PLLC

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Understanding special needs trusts

Often people who are mentally ill or who are disabled rely on their parents or other family members for care and support. What happens when their parents or other family members are no longer around to look after them? Where will they get the support they need? One possible solution is a special needs trust.

Before explaining what a special needs trust can do, it's important to note a potential problem with merely leaving money to a disabled person in one's will. While a bequest such as this can be helpful in some cases, it can make a situation worse in others. If the beneficiary receives government benefits such as Medicaid, Supplemental Security Income or subsidized housing, an increase in their assets from a bequest could make them ineligible for the government benefits.

Among other goals, a special needs trust can maintain the beneficiary's eligibility for government programs while still letting the beneficiary benefit from the assets of the trust.

Special needs trusts can be tailor-made to suit the needs of the beneficiary. A family member or other trusted person can be named as the trustee who handles trust administration and supervises the operation of the trust and disbursement of funds to benefit the beneficiary. The trustee can purchase necessary goods and services to benefit the beneficiary. These goods and services can include vehicles, personal care services, medical and dental services, home furnishings, even vacations and recreation.

A supplemental needs trust must include language saying that the trust is intended to provide supplemental and extra care beyond what the government provides. Although anyone can create a special needs trust as long as the required language is included, many people find a trusts lawyer to be invaluable in handling complicated situations and complex state laws.

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